Black Gold or Yellow Gold?

by: Michael Fitzsimmons June 08, 2008 | about stocks: COP / CVX / GLD / LUKOY.PK / NBR / SLB / STO / USO / XOM    

Michael Fitzsimmons

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Take your pick. Either one is going to make you money. Oil was up over $10 on Thursday and Friday, setting records for both its high price and its US dollar move. In response, the US stock market tanked on Friday and the S&P500 is now down 6.5% for the year.

Reports say US citizens' net worth fell in the first quarter for the second quarter in a row. Talk from Israel about bombing Iran didn't help. If this happens and Iran responds by bottling up the Straits of Hormuz, well then $200/barrel oil will look like a nice bargain and a very severe recession, if not depression, will begin. Of course Israel is on track with Project Better Place to switch over to electric cars. Perhaps the Israelis will wait until their transition to electric cars is complete so they won't be affected by the high price of oil. If that is the case, I suppose we have a year or two before the bombs start dropping.

Regardless of any Israeli action, oil will go to $200/barrel and higher. The inconvenient truth is that worldwide oil supply is simply not keeping pace with worldwide oil demand. The speculators are getting a lot of the blame, but I can't blame them. Are there any rational policies coming from the largest consumer and importer of oil (the US)? Is there any reason to believe that China, India, Russia, and the Middle East will slow down their growth in consumption? Exxon (XOM), Chevron (CVX), and ConocoPhillips (COP) all reported less oil production in 2007 than in 2006 - this in a time when oil prices doubled. That can't be a good sign.

Countries around the world are nationalizing their oil reserves, cutting off needed investment and reducing production capability. The US dollar remains weak, and appears to be headed for another leg down despite all the rhetoric. Because that is all it is, rhetoric. Who can blame the speculators for pushing up the price of crude? I can't. In fact, oil over $200/barrel is exactly what the US needs as it is probably the only thing that will prod the government into action (but don't hold your breath).

Speaking of government policy, just what has been the response of the US government to high oil prices? A lot of talk, no action. There is talk of windfall profits taxes. Well, we all know that doesn't work, as the oil company's lawful responsibility to shareholders means they will simply cut back on exploration and production budgets to keep their profit margins. This will result in LESS crude oil and exacerbate the problem. They also talk about suing OPEC members, which is so laughable I won't spend any print on it. Gas tax holiday? Sure, let's encourage gasoline usage at a time when oil prices are high - that makes a lot of sense [not]. It is exactly the opposite to what we should be doing (raising taxes on gasoline to fund non-oil energy projects like wind, solar, nuclear, and LNG). Any talk of drilling in Alaska or off the continental shelf in the lower-48? Of course not.


Even more worrisome is the US dollar policy. Bernanke talked a good game, but everyone knows he can't do anything but print more dollars: the banking sector is in shambles, the US consumer is loaded with debt (credit cards, home, auto), the US savings rate is a disgrace, and the fiscal and trade deficits out of control. The US imports 60% of its oil and is sending $650 billion dollars out of the country every year, and that number is rising with the price of oil.

What does the President have to say? Well, on Friday, a day when oil was up nearly $8 to a record high and the US dollar was weak (again), President Bush made yet another urgent plea to make his tax cuts permanent (!). In his mind, it is more important to give tax cuts to those making hundreds of millions of dollars every year than it is to acknowledge the role that deficit spending has had on the weak US dollar and therefore the price of oil! Amazing. If that is the government's policy, then why stop at $600 rebate checks? Why not just print $6000 rebate checks? Or even $60,000 checks? I mean, once the currency is not defended, what exactly is the end game here? Do the uber-wealthy making hundreds of millions of dollars every year simply find another country to make their homes once the US currency goes to zero? This is insanity at its highest level.
Click this link to read a REAL energy policy.


People wonder why I mix politics and economics. Well, here is the answer: the US dollar. Don't think for a minute that politics are not related to the US dollar! Look at the S&P500 return for the last 10 years - less than 3.5% and less than inflation. Meanwhile, the value of the US dollar has dropped by 50% in that time period.

Speaking of inflation, just wait til Dow Chemical's (DOW) 20-30% price increases ripple through to Wal Mart (WMT). Did you hear the comments made by Dow's CEO? He railed on the US government for the lack of an comprehensive energy policy. Similar comments made by Jim Mulva, CEO of ConocoPhillips, likewise went unheard by the government. I thought the Republican administration was supposed to listen to business. Why aren't they?

Ok, back to investments. Gold had a huge rise on Friday and will be heading higher along with oil, the weak dollar, and rising inflation. Buy GLD and just hold it. Buy Fidelity Select Gold (FSAGX) and just hold it. Buy some gold bullion and bury it in the backyard.

What is up with the oil stocks? On Friday, they jumped early in the morning following crude oil and then sold off. Why? Many oil stocks are trading at PE's less than the market average! Why? Sure, some oil stocks get margins crimped on their refined gasoline, but good-gracious, many produce oil and gas out of the ground and are going to make TONS of money! Lukoil (LUKOY.PK) kicked some serious butt with their profit report, yet ConocoPhillips doesn't move? Give me a break. Buy these stocks, funds, and ETFs funds as oil and gas are going higher:

  • GLD (Gold ETF)
  • Fidelity Select Gold (FSAGX)
  • Vanguard Precious Metals (VGPMX)
  • USO (Oil ETF)
  • ConocoPhillips (COP)
  • StatOil (STO)
  • Schlumberger (SLB)
  • Nabors (NBR)
  • Fidelity Select Energy Services (FSESX)
  • Fidleity Select Natural Gas (FSNGX)

Any one see the Lehman report about the oil company's planned spending budgets? If not, here it is (Reuters).This is yet another reason oil services are the single best investment theme in the market today.

Disclosure: The author is long all of the investments listed above except, unfortunately, USO.





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This article has 54 comments:

  •  
    Jun 08 09:16 AM
    Israel is not to blame for Iran's threat to peace and stability in the Middle East. The author's sarcasm that Israel may wait to strike Iran until it is not dependent on Oil is as ignorant as it is hateful. It is clear that tiny little Israel is doing more to solve the issues of oil dependency, water management, etc., than the U.S. by encouraging the development of alternatives.The other comments are on target--we do not have a strong dollar and nothing in the pipeline to change that. However, the author's comments are irresponsible and hateful.
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  •  
    Jun 08 09:44 AM
    The only thing the government can do is GET OUT OF THE WAY. Let energy companies drill where there is oil (Alaska and off the coast). Jail the enviromental crazies who are holding up nuclear plants.

    By the way it may be too late to buy oil and gold.
    Reply | Link to Comment
  •  
    Jun 08 10:31 AM
    A really great report Michael.

    It demonstrates why Blogs will take information distribution away form news papers who are channeled into the "right thing to say" for fear of losing Government Ads revenue and Government free news releasee propaganda of all sorts.

    The internet is awsome in many many ways. Treasure it. Remember its beginning bywords "There is no here, there is no there, there is no past, there is no future, everything is here now."

    The government is the problem and not the solution. Why doesn't it cut its payroll and the the crushing load it places on the USA economy when that economy sags?
    Reply | Link to Comment
  •  
    Jun 08 10:43 AM
    Another excellent article. I knew when we invaded Iraq it was an oil play. But in retrospect, it now appears to be the biggest blunder ever made by an administration in the history of the US . The war is crippling us economically, politically and socially. It is just what Bin Laden wanted and we are playing right into his hand.
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  •  
    Jun 08 10:51 AM
    The Vanguard fund has been closed for quite a while. To the best of my knowledge--I hold it--it hasn't reopened. The returns have been the best within the Vanguard family, really spectacular. The key? Coal and platinum, probably.

    The problem with investing with the Wall Street brokers? They trade all over the place.

    Recognize the trends. Go long and stay long. It might not be as exciting as day trading, but you'll do better, ultimately.
    Reply | Link to Comment
  •  
    Jun 08 11:06 AM
    Gloom and doom. Less than 400 million people have rights to a huge land mass with incalculable resources, a stable system of democracy which protects property rights, and the best educational system in the world (at the top end, and also at the bottom end for our lower tier, who are ignored in other systems).

    A main problem is a stupid president who did not understand that he should be a steward of his country's wealth. He wa captured by the oil industry and oligarchs who want to pass on trillions to their offspring without taxes.

    I am hopeful our next president has read more than comic books, and will chart a program that makes it possible for the US to grow.

    We can double our population (easily done) and we have growth.

    The current malaise is just a blip, with dislocation among two groups that have disporportionate shouting rights: out of work Wall Streeters and "moiddle class" people who were seduced by Madison Avenue and lived beyond their means.

    The US is the best bet of any country on the planet. Keep the whining in proper perspective, and don't elect another president who was near the bottom of his class. Presidents should be well educated and smart.

    We have bright prospects, if we work and stop whining.

    LordDarley


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  •  
    Jun 08 12:11 PM
    Thanks for your comments, as usual i like it to be two-way:

    optionsgirl: i sincerely apologize if i offended anyone (jewish or arab). i know better than to get in the middle of that debate. that said, re-reading it, my wording could have been better! the point i was trying to make, and have made before when i praised Israel for their Project Better Place iniative on electric cars, is that some countries (unlike the US) are attempting to release themselves from oil dependency. please read my past energy policy posting where i am sure you will understand my view on this subject.

    CLH: at this point, i respectfully disagree that the gov should get out of the way. the challenge facing us in this energy crisis is so immense, we must have government leadership and support to pull it off. certainly the policies of the last few years have not been helpful, and have magnified both the urgency and the scope of what has to be accomplished.

    BMiki: i was unaware that Vanguard PM was closed, and that being the case i certainly should not be recommending it! thanks for the heads up!

    LordDarley: sorry for the gloom and doom. i don't like to be that way, but alas, i try to be a realist. i started my campaign about worldwide oil supply/demand when oil was at $55 and i was told i was an idiot, doomsdayer, numbskull, etc. etc. now it's at $135, and still no energy policy from the US government or much recognition at all from the US media that we are in a crisis that threatens our economy and national security. i cannot say today that the US is the best nation on the planet: we import 60% of our energy, have two undeclared "wars", our dollar has dropped over 50% since bush was in office, our fiscal deficit is out of control while we give tax breaks to the uber-wealthy. sorry, but in my opinion, the policies of the US government are so skewed, i think we'll have alot of trouble recovering from the hole we have dug (and continue to dig...).

    ALL: i continue to pound the table for Americans to get active, alert their political leaders, and support a sound, well-crafted, long-term, comprehensive energy policy:

    seekingalpha.com/artic...



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  •  
    Jun 08 12:13 PM
    oop! i screwed up: energy policy link is here:

    thefitzman.blogspot.co...
    Reply | Link to Comment
  •  
    Jun 08 12:49 PM
    I'm completely in agreement with Fitz here and deeply regret we've pissed away 8 critical (pivotal years) under Boy George and his merry band of incompetents. In an earlier age they would be tarred and feathered and run out of town--or much worse. Today they'll retire to various think tanks and make millions on the speaking circuit.

    But I'm getting off point. Creative initiatives like Agassi's Project Better Place are precisely what's needed to start weaning ourselves off oil, and the fact that Renault/Nissan's Carlos Ghosn is 100% behind it with Israel as first adopter says to me it has a very good chance of succeeding and becoming a model for the rest of the planet.

    I have been following lithium battery development for several years now and we are VERY close (2-3 years) to seeing mass production of deep, powerful (and safe) 10-year battery packs that will enable PHEVs to go 30-50 miles per charge before the gasser kicks in. This is a game changer for sure as consumers will flock to these cars if the price is right. Interestingly, NIMH battery tech is far from dead, and Honda may well be the first automaker to hit the sweet spot price-wise with its upcoming economy hybrid, which will run on this older, more proven battery tech. Look for PHEVs to go with lithium and non-plug-in hybrids to stay with the nickel batteries. Toyota just announced it is investing close to a billion dollars in battery plants to build both with its partner, Panasonic EV.

    P.S. Historically ironic trivia question of the day (I promise it is VERY on topic): What product line did GM's now on-the-block Hummer brand replace on the factory lines in the mid-90's?

    Yup, the EV1 electric cars, which were abandoned, with existing models gathered and crushed by the company. See "Who Killed the Electric Car" for all the stomach-churning details.

    Extra credit follow-up question: What was Toyota's president's pet project at the same time (mid-1990's), something he believed in so strongly (even with oil at $10-20/barrel) that he put the company into near crisis mode to get it produced within two years?

    Yup, the Prius, which just passed the millionth unit sold mark, and which has cemented Toyota's lead in hybrid auto technology. There is no mystery or magic to their ongoing grab of market share and supremacy in their sector, only smart, committed, and prescient business acumen, something Detroit has shown a consistent lack of. If you want to get really depressed about this company, Google "GM hybrid battery recall" to read about their latest debacle, namely 9,000 leaky NIMH Cobasys battery packs in the Saturn Vue mild hybrid.
    (Toyota's Prius packs have been nearly perfect, with many going 200,000 miles on the original.)
    Reply | Link to Comment
  •  
    Jun 08 02:08 PM
    I guess you do hold good chunk of gold and oil stocks.
    Hold some double short SNP too, it is called hedging.
    Good article.
    Reply | Link to Comment
  •  
    Jun 08 02:46 PM
    good article and thks for the comments and the answer to them.
    only one thing i cannot agree is making just only for oil the mistake to look for it at places which are to dangerous in the long term, i.e. alaska. once the environment there is "broken" you cannt mend it with the money you have gained by the oil. its like midas and gold.
    Reply | Link to Comment
  •  
    Jun 08 03:07 PM
    ok, as bill maher would say "it's time to get real":

    optionsgirl: i've changed my mind, and will get in the middle of the Israeli/Arab debate. these things need to be said in spite of the hellstorm that will be dumped on me for saying so:

    i was less than honest in my first reply to you. it was indeed sarcism and a dig at US/Israeli policy. i believe that policy has been a complete disaster - not only to the US, but to Israel as well. let me explain:

    it is no big secret that Israeli lobbyists were pushing hard for war in Iraq (like they are now for war in Iran). they also have refused to acknowledge the right of a Palestinian state. so, what's the result of these policies?

    - massive backlash in the arab world against the US and Israel
    - precipitated the first war i can remember that Israel did not walk away the clear winner
    - made Iraq a beehive of "terrorism"
    - deficit US spending leading to a huge fall in the US dollar
    - fall of US prestige in the world (not to mention a reputation for torture)

    but, most importantly, US/Israeli policy has resulted in these two items:

    - strengthened the arab oil producers by helping to raise the price of oil thus generating arab wealth beyond all comprehension
    - forced Iran to develop a nuclear policy

    explanation for these two views:

    when the US went into Iraq in a manufactured war where Rumsfeld actually threatened to use nuclear weapons (!), it took millions of barrels of oil off the markets for years. at the same time developing country oil demand went up. the price of oil popped. as the Iraqi conflict raged on year after year, a geopolitical price premium was tacked onto oil, and has remained ingrained in the price. oil went higher again. Arab oil producers are becoming ungodly wealthy. this would have happened sooner or later due to worldwide supply/demand fundamentals, but US/Israeli policy accelerated the price movement to the upside. look as friday's over $10 move in oil - all based on an Israeli official saying a strike against Iran was "inevitable"... even more wealth to Arabs. good for Israel??

    on the second point, Iran has watched its neighbor Iraq be invaded, lose their sovereigncy not to mention hundreds of thousands of its citizens dead. just to make a point, what would you expect US response to be if a foreign country invaded say Mexico, called the US a member of the "axis of evil" and possesed nuclear weapons and threatened to use them? wouldn't US policy in that scenario be extremenly foolish not to develop nuclear technology to protect itself? ok then, why is it different for Iran? if i were them, i would be arming myself too! good for Israel??

    see, the US/Israeli policy has brought on the exact scenario that they are now complaining about! it is a failed policy: the Arabs are richer and want nuclear weapons to protect themselves from US/Israeli policy.

    now, the Russians made a great proposal to solve the Iranian situation - international inspections, Russian delivery of the fuel, diplomacy etc. what was the response by the Israeli lobby and the US? no negotiations along those lines. Iran proceeded accordingly.

    speaking of Russia, how long do you think Russia and China are going to stand by and watch the US/Israel connection take over middle eastern oil that they themselves so badly need (at least in China's case)?

    now, Israeli had a leader of vision who could see through all this stuff, and was backed by the majority of its people. he, in an event so remininscient of JFK, was assassinated. what was the result? more war, death, and still no Isreali security.

    the thing i don't understand about Israeli policy is this: if the argument Israel made about its right to exist as their own country was correct, then why does that same argument not hold true for the Palestinians many of which were evicted from the land that is now Israel? it just doesn't make sense to me. it is not logical. and it will simply not lead to peace or Israeli security. i believe Yitzhak Rabin understood this.

    violence only leads to more violence. the way forward, like Obama has said many times, is via diplomatic means. if Israel or the US bombs Iran, and if Iran responds by shutting down the straits of Hormuz, which most intelligence reports say they are capable of doing, 25% of the world's oil supply goes off the market in an instant. what do you think the price of oil will do? what do you think the result of that price and supply disruption will be to a US economy that is already on the brink of a recession? to the world's economy?

    as i have said many times, it won't matter how many US dollars a person holds in their account(s) if the basics of food and protection are gone. this could easily happen if a economic depression hits the US as a result of Israeli or US bombing of Iran. we go into economic chaos if the price of oil goes to $300/barrel, or worse yet, cannot be obtained in quantity at any price. that is where current US/Israeli policy is leading us, IMHO.

    thus, the sarcastic remark.

    leh: thanks and great comments!
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  •  
    Jun 08 03:23 PM
    We are in a terrible situation. Some of the folks that have oil and gas hate us (middle east) and some are just jealous (Mr. Putin and his buddies). A Congress that is just broken on energy policy, that refuses to let our companies drill. Oil prices in the short term can go hard in either direction but long term the price must move higher. I am long DBO, USO,DBC UNG and have been since 12/15/07. All markets have corrections, and there is VERY strong for oil at $120.
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  •  
    Jun 08 04:00 PM
    the US produces 5.5 million barrels of oil....and I believe the demand is 21 million barrels.

    do the numbers and we actually import 73.8% of our oil.

    We are also starting to import more gasoline.......we may be worse off than you think.
    Reply | Link to Comment
  •  
    Jun 08 04:06 PM
    I always enjoy reading this blog - good work. It pains me to see our country show no leadership on the energy issue and it's disappointing that most americans don't grasp its importance. I hope you continue blogging and that more and more people read your posts - and other energy related websites.

    Our standard of living here in the U.S. is declining. We are, on average, wealthy enough to weather a "tougher life." But, people in the third world will be hit much harder.

    What do you think of the following? ...

    Let's stop producing ethanol from corn or any other biomass, all of which are an energy negative process, and go back to MTBE. Yes, we actually cause from greater energy consumption by turning corn into ethanol. This idea is the only one I can think of that could be done relatively quickly to give some relief to gasoline prices. How much? I don't know... does anyone else?

    We need nuclear, wind and domestic exploration of natural gas and oil. But, as you say Michael, we have no plans on the books. We have no leadership. We don't have a leader. Keep blogging please.
    Reply | Link to Comment
  •  
    Jun 08 04:58 PM
    I don't know if this angle was covered--in the lengthy and great list of comments--but having the presumptive Democratic nominee consistently trashing NAFTA isn't helpful either. The oil sands of Canada have vast resources, and Canada is currently the largest supplier of energy our country. After the dustup over NAFTA prior to the Ohio Primary, Canadian Trade Minister David Emerson drily noted:

    "Knowlegdeable observers should inform Mr. Obama that our country is currently the largest supplier of energy to the United States."

    That Barack Obama wouldn't be aware of this tells me that having been through 8 years of the amateur hour, we're in for another four at least. The Senator's clumsy attempt to assure the Canadians that he supported NAFTA (he was against it before he was for it, I guess) was painful to watch.

    Suffice it to say that if we manage to antagonize even the Canadians, we'll have pretty much alienated the entire world. Moreover, given the way Nancy Pelosi torpedoed the Colombia Trade Pact (taking care of her big labor buddies) we're well on our way to doing the same thing in Latin America--unwise given the large oil reserves off Brazil. Sorry if this sounds political--it's actually coming from a centrist Democrat.
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  •  
    Jun 08 05:18 PM
    Excellent article - you really nailed the salient points of what is really going on in petro-ecoworld. The Peak Oil Put is now in on the energy markets and the price of all oil stocks and all its derivatives will increase in price with little down side due to people understanding what Peak Oil means. Thank goodness that most people (& writers on this site) do not understand the difference between available oil resource and flow rate because they will make us a lot of money taking the short side of our energy trades. And remember it takes oil to get the p metals out of the ground so physical metal in the hand is worth much more in the ground. You are spot on and keep up the good writing.
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  •  
    Jun 08 05:25 PM
    It is interesting to note that Saudi's are investing heavily in heavy, sour crude refining. Wonder why? Peak in light sweet crude maybe?

    The G8 meeting this weekend did not offer much hope of near term relief. They didn't blame speculators or big oil for the rise in the price of crude. They seemed to accept the supply/demand argument as the primary cause of the rise in oil. Their focus was on conservation and alternative energy. Wonder why? Maybe they know that we are reaching or are at the peak in economically available petrol.

    Visit americansolutions.com to promote development domestic exploration for oil. If we don't tend to our own business on energy, we'll be out of business!!
    Reply | Link to Comment
  •  
    Jun 08 06:36 PM
    what a great post. the author is spot on with respect to every comment, including the disastrous effect of u.s. foreign policy in the mideast, including israel and iraq. israel cares about israel and only israel, yet we fund it treat it like our 51st state...with 2008 direct foreign aid set at $2.4 billion, or about 20% of its defense budget. the dollars are insignificant by u.s. standards...but the jewish vote is not and there are lots of buyers in both major parties. we've paid a major price for the lopsided nature of our mideast foreign policy.

    with respect to iraq, we are now spending over $100 billion annually on the war. that tab is about $3,600 per iraqi, which is more than triple iraq's 2007 per capita income. the entire budget of the country is about $48 billion for 2008. what do i conclude from this?

    iraq is our 52nd state.

    the part of the author's post i take issue with is that of the effect of speculation on oil prices. it should be severely curtailed, and here is why:

    futures markets are a comparatively new innovation, particularly for oil trading. they were designed for the purpose of allowing producers and users a vehicle to hedge their production and/or consumption activities. these markets were never intended to function as a proxy for currency, currency hedges or a hedge against the actions or inactions of incompetent governments like our own. to the extent that financial speculators are permitted to distort the equilibrium price by distorting supply/demand fundamentals through en mass buying and rolling over long positions, never taking delivery of the end product, it has the potential to threaten the national security of any non-producing nation. that hank paulson, our own treasury secretary, denys that speculation is a material factor in today's oil prices is the position of an idiot. underlying demand for the raw product has not resulted in a quadrupling of the price in 4 years and a double in one year. supply and demand is just one of many factors at work here....all others under the umbrella of "speculative activity."

    adding fuel t the speulative fire is the unintended consequences of absurdly low short term interest rates, rendering the opportunity cost of commodities speculation nearly negligible. that, along with 14:1 leverage for oil traders, lowers the bar for virtually anyone who wishes to try their hand at speculation...whether a hedge fund or an armchair trader.

    i don't believe in banning futures trading in oil or anything else. i do believe in recognizing that speculators have usurped the domain intended for legitimate hedging activities of producers and users. raise the margin requirement from its current 7% or so to 50%. then let traders speculate all they wish, if they can afford it.



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  •  
    Jun 08 06:44 PM
    You were doing good until you took back your comments about the Middle East The Fitzman. Then... you spoke honestly. I found your comments refreshing and accurate. Mr. Bush does not have a clue and will go down in the same light as Mr. Nixon and Mr. Carter. He fiddles while Rome burns.

    This is not a political blog however and your recommendations are spot on and timely. The best I have seen in about a week. We do need it at $200.00 so we can wake up and move on to better things. Remember, "De Facto Peak Oil."
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  •  
    Jun 08 08:30 PM
    CLH-you are way off base
    Too late to buy gold? It's well over 100% below its inflation adjusted high from 28 years ago. You should count yourself fortunate gold took a breather and retracted giving you another shot.
    Now is the time to be buying, that is, of course unless you believe the government has a handle of things.
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  •  
    Jun 08 08:38 PM
    What I do not understand, why is everyone arguing weither oil is speculation or peak oil. While all you waste your time debating, you should just invest in the so called speculation and make yourself some damn money. Oil is at a "peak" for the production of cheap oil, not oil production in general. Be smart and make money off what is happening in the economy. We all need to stop watching the talking heads on cnbc. The media reports what the people paying them what you to hear. Just like the presidential candidacy, the candidates pay to have the media travel with them and report what they want you to hear. After the media writes their articles and make money they then pay back the candidates. That's how cnbc and the rest of the networks operate. Get away from group thinking and read and educate yourself about what is really going on. I come home every day from work and laugh at all the dumb asses who think oil price is speculation. Speculate $137.00 oil when fill your car with gas next time. I am going to speculate all the way to the bank!!
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  •  
    Jun 08 09:45 PM
    smart money:

    you're part of the "i don't give a damn what's best for the country as long as i get what i want, and everybody is a dumb ass but me" crowd.

    can't say i know many people like that....can't say i want to.

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  •  
    Jun 08 09:56 PM
    I have to compliment you on a fantastic article, and the volume of thoughtfull replies. I travel abroad frequently and take much flak for U.S, foreign policy. we have thrown away years of world wide goodwill since 9/11. I came here 20 yrs. ago. This place always shone as a bright light to the world, now I get the feeling from people overseas that they are tired of our carryon. keep up the wonderfull/insightfull articles.
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  •  
    Jun 08 10:01 PM
    Cheap shots at Bush are popular right now but fail to deal with his repeated requests to an ignorant congress that supply of crude oil needs to be developed in ANWAR and off the continental shelf. There was an energy policy and congress simply failed repeatedly to act on it. If you think things are bad now just check back in 4 years of a Democrat in the White House and you will REALLY see the US trashed! By the way, Iraq was all about the threat of weapons of mass destruction (not finding them doesn't count unless all administrations can turn the clock back and revise history). The three books by Bernstein only mentioned the word "oil" three times - it was NEVER about oil - that's just conspiracy theorising..... too much nasty political prejudice in these posts which takes a bit away from otherwise wise concerns over peak oil and the disaster to come!
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  •  
    Jun 08 10:09 PM
    Two short comments.
    There is a crisis brewing and many of you see and that is due to two causes religion (which for its own benefit, promotes population growth) and formerly cheap energy due to oil. Both have created the population explosion which can no longer be sustained but is supposed increase to 9 billion. Read The Long Emergency by James Howard Kunstler for more.

    My sister, who is a caring person, is typical of many Americans. When I told her to read the above book, she declined because she doesn't want to read depressing books. When i asked her how much gas she uses, she didn't know (drives a Hyundai SUV). She would never vote for Obama and voted for Bush two times. I love her, but we are doomed.

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  •  
    Jun 08 10:47 PM
    TedSpick, ANWAR does not contain enough oil to do squat. At our consumption rate we'd burn through that in years, not decades. And that's assuming consumption wouldn't increase over that time frame (highly unlikely).

    The Iraq war was a complete an utter farce, and that has been pretty well established. They had trouble just keeping the lights on at night, let alone produce weapons of mass anything. Whatever the reasons for the in